Day Order

A day order is a type of trading instruction that remains active only until the close of the market on the day it is placed. If the order is not executed by the end of that trading session, it automatically expires and is removed from the broker’s order book. Day orders are the default order type for most equity and futures markets, contrasting with “good‑til‑canceled” (GTC) orders that stay alive until manually canceled or filled.

How It Works

When a trader submits a day order, the broker tags it with a time‑in‑force instruction of “DAY.” The order lives in the exchange’s matching engine for the duration of the regular trading hours.

• If the specified price (limit or stop) is met, the order executes immediately.
• If the price is not reached, the order sits idle.
• At the market’s official close—typically 4:00 p.m. EST for U.S. equities—the exchange purges all unfilled day orders.
• The trader must resubmit a new order for the next session if the trade is still desired.

Day orders can be market, limit, stop, or stop‑limit orders; the defining feature is the expiration at day‑end, not the order type itself.

Why It Matters

Using day orders helps traders manage exposure to overnight risk. For example, an investor who wants to buy a stock only if it falls below $50 during today’s session can place a limit day order at $50. If the price never reaches $50, the order expires, preventing an unwanted purchase after hours when liquidity is thin and price gaps may occur. This automatic expiration reduces the need for manual cancellation and ensures that trading intentions align with the intended trading horizon.